THE NEW SOPHISTICATES

If information gives power, then consumers will be more powerful
and control more economic decisions in the future. By 2020, 60
percent of all consumers in the United States will be actively
participating in the generation of information involved in
day-to-day purchasing decisions. This will mean more consumer
control over economic decisions, a reformulation of the basis of
all business communications with the consumer, and a change in how
we advertise, build brands, market, and sell. The basis for all of
this change will be the gradual emergence of a sophisticated
consumer who understands the vital power of information in
household lifestyle decisions. The emergence of this consumer can
be traced through at least four demographic characteristics:
education, income, work experience, and access to communication
technologies. We can quantify the number of new consumers by using
concrete measures of attainment:

Education: Training in an academic discipline instills a belief
in the effectiveness of information in making more enlightened
decisions. Our new consumer will have gone to college for a year or
more.

Work experience: Working in an information-intensive environment
builds a pattern of behavior that carries over to decisions made at
home. Our new consumer will be working as a manager, professional,
or technician in an information-intensive job.

Income: Living in a household with enough purchasing power to
make discretionary decisions on a regular basis means information
will be a useful tool in tailoring consumer choice. Our new
consumer will be living in a household with spending power of more
than $50,000 (in 1999 dollars).

Access to technology: Technology empowers people to gather,
analyze, and communicate information. Our new consumer will have
access to high-speed, interactive, multimedia communication devices
at home.

We define a new consumer as one who has at least three of the
four characteristics mentioned above. Given longer-term trends, the
number of these sophisticated new consumer households, which
accounted for about 20 percent of all households in the U.S. in
1980 and 45 percent in 1999, will reach 60 percent by 2020. But the
demographic characteristics by themselves are not important.
Rather, it is the patterns of behavior that these new consumers are
likely to have that will matter most. New consumers will be much
more likely to gather more information before they make a purchase
or the decision to experiment with a new product or service. They
are likely to use a greater variety of sources to gather that
information, and at different times, through different channels,
and at different locations. So they will be much more skeptical of
any single source of data. And they are much more likely to value
information when they themselves initiate the search process.

This mean big changes are in order for how businesses
communicate. Any single message on a individual media channel will
have less impact; more messages via a variety of channels will be
needed to have the same impact. An increasing portion of the
information flow will be interactive in nature, involving a direct
response to a consumer inquiry. Brand-building will be much more
complex as it migrates to multiple messages in many channels. The
role of consumer agents who track down information for consumers
will be of increasing importance. And consumers will use filters
more actively to bypass intrusive or irrelevant messages.